SINGAPORE: Many residents at The Tanamera condominium are weary of en blocs after three failed attempts without any breakthrough.
A consensus has been tough to reach, given the various needs of unit owners there.
Some want to move while others enjoy the convenience of their location - close to Tanah Merah MRT Station, hawker centres and a wet market, said the condominium’s collective sales committee chairman Pooba Mahalingam.
Another challenge is that some of the units are not occupied by their owners, he said.
“The owner is not there and we cannot get that person to come down and sign the form. And we get feedback like ‘We will sign when you reach 70 per cent’ and ‘We will sign when you reach 75 per cent'", he told CNA.
“Such a response makes the job very difficult … because if everybody says they're waiting for 70 per cent, then we will never achieve it.”
Collective sales require the support of a majority of owners. For developments under 10 years old, at least 90 per cent of owners must agree, while a slightly lower proportion of owners - 80 per cent - must agree for developments 10 years or older like The Tanamera.
Different opinions on the asking price for development can be tricky, Mr Mahalingam added.
“Whatever price (developers) give us now to replace the property is going to be a challenge, because we cannot cross the road and buy another property at the same price,” he said.
Private housing prices rose by 3.9 per cent in 2024, according to flash estimates by the Urban Redevelopment Authority.
Owners in a project vying for en bloc will first look at how much it will cost them to buy another home, said Mr Lee Sze Teck, senior director of data analytics at Huttons Asia.
“The replacement cost right now for them is high. That's why they stick to an asking price they feel will allow them to buy (a) replacement home,” noted the property analyst.
However, some estates may be biting the bullet by slashing prices.
For instance, freehold mixed-use development Roxy Square may be relaunched for collective sale at a reserve price of S$1.12 billion (US$818 million), down from S$1.25 billion, its sole marketing agent JLL said last week.
While a lack of new supply of private developments and more favourable loan interest rates for potential buyers may feed developers' appetite to build more, the price to pay for a collective land sale could prove too much for them, said experts.
They flagged concerns from developers about the initial purchase price, as well as the costs associated with redevelopment and the potential market for new units.
Mr Nicholas Mak, chief research officer at property portal Mogul.sg, noted that 80 per cent of the private housing units sold in the market last year were from the Government Land Sales programme under which state land is released for private developers.
The remaining was from the private land sale market.
Cooling measures introduced in 2023 have reduced investment demand from foreigners and caused pause for Singaporeans considering buying more properties, which will make it riskier for developers to invest in such land acquisition, said Mr Mak.
This is because the developers have to gather enough sales to complete and sell a development after acquiring the site within five years.
Singaporeans must now fork out 20 per cent in additional buyer's stamp duty for a second property if they are still holding onto their first. For foreigners, this figure is 60 per cent.
“If (developers) can't count on foreign demand, for example, it's going to cause them to hesitate to buy en-bloc sale land,” Mr Mak said.
He noted that developers are likely to continue to go down the Government Land Sales route, as supply is being ramped up.
That could however mean that buyers will eventually pay more for a new private home, said Mr Mak.
The process is competitive and developers bidding higher to acquire the land will have the effect of pushing up the prices of units, he pointed out.
Analysts expect higher sales activities and anticipated interest rate cuts to drive prices up between 4 and 7 per cent.
More than 20 new projects are expected in 2025, including at least two executive condominium (ECs) sites in locations like Toa Payoh, Yishun and Clementi.
However, with uncertainties remaining over the ramping up of new private homes, analysts said more people may opt for the Housing and Development Board (HDB) resale market.
“If the new sale prices continue to increase … I think a lot of buyers may be looking for cheaper alternatives in the resale market, especially for the sandwiched median income families who are not eligible for HDB (Build-to-Order flats) or ECs,” said Professor Sing Tien Foo, provost’s chair professor at the National University of Singapore’s real estate department.
He added that barring global economic headwinds, the balance of strong demand and supply could somewhat stabilise prices in the property market this year.
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A consensus has been tough to reach, given the various needs of unit owners there.
Some want to move while others enjoy the convenience of their location - close to Tanah Merah MRT Station, hawker centres and a wet market, said the condominium’s collective sales committee chairman Pooba Mahalingam.
Another challenge is that some of the units are not occupied by their owners, he said.
“The owner is not there and we cannot get that person to come down and sign the form. And we get feedback like ‘We will sign when you reach 70 per cent’ and ‘We will sign when you reach 75 per cent'", he told CNA.
“Such a response makes the job very difficult … because if everybody says they're waiting for 70 per cent, then we will never achieve it.”
Collective sales require the support of a majority of owners. For developments under 10 years old, at least 90 per cent of owners must agree, while a slightly lower proportion of owners - 80 per cent - must agree for developments 10 years or older like The Tanamera.
DIFFERING OPINIONS ON PRICE
Different opinions on the asking price for development can be tricky, Mr Mahalingam added.
“Whatever price (developers) give us now to replace the property is going to be a challenge, because we cannot cross the road and buy another property at the same price,” he said.
Private housing prices rose by 3.9 per cent in 2024, according to flash estimates by the Urban Redevelopment Authority.
Owners in a project vying for en bloc will first look at how much it will cost them to buy another home, said Mr Lee Sze Teck, senior director of data analytics at Huttons Asia.
“The replacement cost right now for them is high. That's why they stick to an asking price they feel will allow them to buy (a) replacement home,” noted the property analyst.
However, some estates may be biting the bullet by slashing prices.
For instance, freehold mixed-use development Roxy Square may be relaunched for collective sale at a reserve price of S$1.12 billion (US$818 million), down from S$1.25 billion, its sole marketing agent JLL said last week.
Related:
CHALLENGES FOR COLLECTIVE SALE
While a lack of new supply of private developments and more favourable loan interest rates for potential buyers may feed developers' appetite to build more, the price to pay for a collective land sale could prove too much for them, said experts.
They flagged concerns from developers about the initial purchase price, as well as the costs associated with redevelopment and the potential market for new units.
Mr Nicholas Mak, chief research officer at property portal Mogul.sg, noted that 80 per cent of the private housing units sold in the market last year were from the Government Land Sales programme under which state land is released for private developers.
The remaining was from the private land sale market.
Cooling measures introduced in 2023 have reduced investment demand from foreigners and caused pause for Singaporeans considering buying more properties, which will make it riskier for developers to invest in such land acquisition, said Mr Mak.
This is because the developers have to gather enough sales to complete and sell a development after acquiring the site within five years.
Singaporeans must now fork out 20 per cent in additional buyer's stamp duty for a second property if they are still holding onto their first. For foreigners, this figure is 60 per cent.
“If (developers) can't count on foreign demand, for example, it's going to cause them to hesitate to buy en-bloc sale land,” Mr Mak said.
He noted that developers are likely to continue to go down the Government Land Sales route, as supply is being ramped up.
Related:
POSSIBLE INCREASE IN PRIVATE HOME PRICES
That could however mean that buyers will eventually pay more for a new private home, said Mr Mak.
The process is competitive and developers bidding higher to acquire the land will have the effect of pushing up the prices of units, he pointed out.
Analysts expect higher sales activities and anticipated interest rate cuts to drive prices up between 4 and 7 per cent.
More than 20 new projects are expected in 2025, including at least two executive condominium (ECs) sites in locations like Toa Payoh, Yishun and Clementi.
However, with uncertainties remaining over the ramping up of new private homes, analysts said more people may opt for the Housing and Development Board (HDB) resale market.
“If the new sale prices continue to increase … I think a lot of buyers may be looking for cheaper alternatives in the resale market, especially for the sandwiched median income families who are not eligible for HDB (Build-to-Order flats) or ECs,” said Professor Sing Tien Foo, provost’s chair professor at the National University of Singapore’s real estate department.
He added that barring global economic headwinds, the balance of strong demand and supply could somewhat stabilise prices in the property market this year.
Continue reading...